Goldman Sachs ‘advising on Icon Group sale’

Picture: AFP

Investment bank Goldman Sachs is understood to be advising on the sale plans of Australia’s largest cancer care provider Icon Group, believed to be worth at least $2 billion.

As reported by DataRoom late last year, Icon has appointed Sonic Healthcare’s chairman Mark Compton as its own chairman as it looks to either a sale or a float on the Australian Securities Exchange.

The understanding is that while Goldman Sachs has not yet been officially mandated for Icon, it has been already guaranteed a role.

Other investment banks are expected to be selected around March or April, say sources.

Icon Group was sold by Quadrant Private Equity in 2017 to a consortium including Queensland Investment Corporation, Goldman Sachs Private Equity and China’s Pagoda Investments for $1.2bn.

It operates 30 cancer care centres across Australia, delivering a mix of radiation therapy, chemotherapy and blood disorder treatment for patients.

It also operates through Asia and in New Zealand.

Some say that the company has had success rolling out its growth strategy in China where it has about six sites.

The understanding is that annual earnings before interest, tax, depreciation and amortisation of the business have since doubled from the time it was purchased in 2017, when it was making about $80m.

The country’s largest private hospital operator, Ramsay Healthcare, is considered a strong contender. Icon and Ramsay are understood to have already held talks.

The private hospital group is understood to be interested in expanding its pharmacy business and Icon is thought to be attractive because of its compound pharmacy business, selling drugs not available over the counter.

It also fits the bill because it is a business of scale and Ramsay has always looked at big-ticket acquisitions that complement its existing network.

Ramsay recently missed out on acquiring the Priory Group in Britain to Dutch buyout firm Waterland Private Equity which reportedly paid owner Arcadia about STG1.08 billion.

The sale of Icon comes at a time that healthcare businesses remain in strong demand by private equity investors, while equity investors are also expected to find the business appealing.

Last year, Quadrant Private Equity achieved a strong price for the sale of its Qscan Radiology Clinics business, which was picked up by Infratil and Morrison & Co for $735m.

Elsewhere, Macquarie Infrastructure and Real Assets announced this week that it would add a 2.5c per unit special dividend payment to its $300m offer for the listed horticultural land owner Vitalharvest Freehold Trust in what has proved to be a coup for investors.

It comes after fund manager Investors Mutual wrote to the trust’s responsible entity, Perpetual, expressing concerns that it had offered support for MIRA’s bid of $1 per unit when a special dividend payment of at least 4c per share due to investors was not included in the offer.